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Q&A: Bi-Lo Holdings CEO Randall Onstead on the importance of adaptability

7 min read

Restaurant and Foodservice

Randall Onstead (Photo: Bi-Lo Holdings)

The son of a grocery store owner, Randall Onstead, CEO of Bi-Lo Holdings, was raised in the business. Almost 50 years ago, in 1966, his father started a grocery chain in Texas of his namesake — Randalls, where he worked when he was 10 years old. From there, it was a series of upward progressions. He went on to grow his career at Randalls Food Markets Inc., parent company of both Randalls and Tom Thumb supermarket chains in Texas, eventually rising to lead the company as chairman, president and CEO. Between 1997 and 1999, Onstead increased the business value from $645 million to $1.85 billion.

In 1999, Randalls Food Markets, Inc., was sold to Safeway, and he moved on to serve as president and CEO of Texas-based crafts and decor retailer Garden Ridge Corp., and then as president of Dominick’s Finer Foods, a division of Safeway, Onstead tells us. Then, in 2008, he joined BI-LO on its Board of Directors and then became president and CEO of Bi-Lo Holdings, parent company of BI-LO, Harveys and Winn-Dixie supermarkets, in 2012 after BI-LO and Winn-Dixie merged.

This year, Onstead added yet another leadership role to his repetoire — vice chair for the Food Marketing Institute‘s Public Affairs Committee. The incoming Public Affairs Committee met for the first time in October and reviewed FMI’s top five public-affairs issues for the year ahead, which included Affordable Care Act amendments, food labeling (menu labeling, GMO labeling, product dating), and the definition of “full-time vs. part-time,” Onstead said.

We talked to Onstead about what today’s consumers want, the importance of being flexible and what it takes to rise in the ranks of the food retail industry.

Can you tell us about your path to becoming CEO of Bi-Lo Holdings? What were your greatest challenges, successes?

I’ve always worked in retail and find it fascinating to operate so close to consumers. One of the biggest challenges of working in grocery is that margins are always razor thin and capital costs are high, so spending wisely is critical. On the other hand, one of the biggest rewards of working in the grocery industry is that everyone in the market is a potential customer, so there is lots of opportunity for growth.

One of the things I’m most proud of is the success we’ve had at Bi-Lo Holdings in adapting our stores to the neighborhoods they serve. From our product offerings to our community involvement activities, we make a conscious effort to become locally relevant to customers, which I believe will lead to organic growth.

How do you feel the food industry has changed or evolved in the past 10 years, and how has that affected your leadership style and the direction you’re taking your company?

It’s important in today’s market for retail leaders to be flexible and adapt to the changes taking place.

Today, people have more choices when shopping for groceries and are willing to shop multiple locations to fulfill their families’ needs. Value and price matter more today than ever.

To meet the demands of today’s shopper, we’ve learned that having scale and the ability to leverage costs and keep expenses down is highly important. We also put more of an emphasis on value programs — like fuelperks!, which helps customers save on gas by purchasing their groceries in our stores — that differentiate us from other value offers in the market.

In recent years and into the near future, I believe that digital and mobile technology developments will also greatly impact how people shop, and it’s important for us to learn how to apply these changes to the grocery industry. For example, many retailers that offer consumers loyalty cards will continue to learn how to unlock the power of this data as technology improves, allowing us to target consumers on a more personalized level.

Are you working with FMI to lead and offer guidance to the industry? If so, how, and are there specific priorities going into 2015?

As most members are aware, FMI’s talented government relations department, led by Government and Public Affairs Senior Vice President Jennifer Hatcher, brings decades of government and industry experience to provide a voice for our industry before Congress and the regulatory agencies and to amplify our voice in state capitals across the country.

This year, I am pleased to serve as FMI vice chair for the Public Affairs Committee as part of the leadership team assembled by our new chairman, Jerry Garland. The Public Affairs Committee’s purpose is to provide key industry input into the planning and review of FMI’s Public Affairs activities, of which there are many.

How do you get your team to get excited about, get on board with and invest themselves in initiatives that are priorities to your company?

In our industry, we set long-term goals and strategies but often have to make adjustments monthly if not weekly based on consumer needs. With all that change, we strive to be a flexible organization that is able to adapt and adjust our priorities in order to meet our goals.

I believe that one of the best ways to get my team on board with our company initiatives is to be transparent with them. We need to have a continuous flow of transparent communications to our associates and a clearly articulated vision of where the company is going so they understand what key initiatives we need to work on today to get us there.

What do you look for in potential leaders at your company, how do you develop mid-level managers?

I continue to be pleased with the level of talent that exists within our company. To identify potential leaders from our talent pool, we look for those who we believe can truly make a difference here — individuals who are willing to embrace challenging projects and inspire a team of co-workers to help complete them.

To develop managers, in our stores, we have clear career paths that encourage store associates to gain experience throughout the store and build responsibility to prepare them for management. At our store support centers, we offer a variety of developmental workshops that help managers and non-management associates add to their skill sets and get them ready for company leadership.

We also have a performance review process that includes quarterly feedback sessions between supervisors and associates that help us identify leadership traits and create career development plans. This helps us look for important traits like self-motivation, ambition and dedication to the organization as we identify potential leaders within the company.

What are three key things you’ve learned along the way that you’d like to pass along to other emerging leaders in the food retail industry?

First, I’ve learned the importance of surrounding myself with a strong leadership team. The team that we have in place now is comprised of some of the finest supermarket executives anywhere, and I believe their passion and effectiveness trickles down to all of our associates.

Second is one of our five operating principles — to work backwards from the customer. I strongly believe that the best way to succeed in retail is to listen to your customers – what they like, dislike and desire in their shopping experience — and formulate your marketing, operations and pricing strategies to accommodate their needs.

And finally, as I mentioned previously, it is of the utmost importance to maintain clear, transparent two-way communication with our associates — from the senior leaders in our store support centers to the cashiers in our stores. The better each of our associates understands the importance and priory levels for company initiatives, the more fluid the execution will be throughout the entire organization. It is especially important for us to provide ways for “front line” associates who interact with customers on a day-to-day basis to give us their feedback on what works and what doesn’t so we can make adjustments where needed.


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